According to a report by Altus Market Research titled, “Global Water Heaters Market Growth Strategies 2022-2031 Including Product Type(Solar Heaters; Electric Heaters; Gas And Propane Heaters; Geothermal Heaters); End-User; Distribution Channel(Supermarket/Hypermarket; Specialty Stores; E-Commerce)”, the global water heaters market reached a value of nearly $29,474.4 million in 2021, having increased at a compound annual growth rate (CAGR) of 7.8% since 2016. The market is expected to grow from $$29,474.4 million in 2021 to $46,953.6 million in 2026 at a rate of 9.8%. The market is then expected to grow at a CAGR of 7.5% from 2026 and reach $67,513.8 million in 2031.
Growth in the historic period resulted from a rise in disposable income, high investments, adaption of the internet of things (IOT) and new product launches along with advanced features. Factors that negatively affected growth in the historic period were coronavirus pandemic and shortage in electronic components supply.
Going forward, increased internet penetration, a rise in merger and acquisition activity and growing demand for instant heating units will drive the market growth. Factors that could hinder the growth of the water heaters market in the future include rising interest rates and changing regulations.
The global water heaters market is concentrated, with a large number of players. The top ten competitors in the market made up to 24.92% of the total market in 2021. This can be due to the existence of number of local players in the market serving customers in particular geographies. Major players in the market are A. O. Smith Corporation, Rinnai Corporation, Vaillant Group, Ariston Thermo Group, Rheem Manufacturing Company, Viessmann Group, Haier Smart Home Co., Ltd., Bradford White Corporation, Robert Bosch GmbH, Bajaj Electricals Ltd and other players.
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The water heaters market is segmented by product type into solar heaters, electric heaters, gas and propane heaters, and geothermal heaters. The electric heaters were the largest segment of the water heaters market by product type, accounting for $17,301.5 million or 58.7% of the total market in 2021. Solar heaters are expected to be the fastest-growing segment going forward at a CAGR of 11.5%.
The water heaters market is segmented by end user into residential, commercial, and industrial. The residential market was the largest segment of the water heaters market by end user, accounting for $16,363.3 million or 55.5% of the total market in 2021. Residential is expected to be the fastest-growing segment going forward at a CAGR of 10.3%.
The water heaters market is segmented by distribution channel into supermarket/hypermarket, specialty stores, e-commerce, and others. The specialty stores was the largest segment of the water heaters market by distribution channel, accounting for $16,450.2 million or 55.8% of the total market in 2021. E-Commerce is expected to be the fastest-growing segment going forward at a CAGR of 13.3%.
Asia Pacific was the largest region in the water heaters market, accounting for 34.1% of the global market in 2021. It was followed by North America, Western Europe and the other regions. Going forward, the fastest growing regions in the water heaters market will be Asia Pacific and Middle East, where growth will be at CAGRs of 10.9% and 10.8% respectively from 2021-2026.
The water heaters sector, due to covid, led to a crisis around staff changes, with lockdowns, border closures, and lack of international flights leaving hundreds of thousands of employees at home, unable to be replaced or repatriated, these factors caused a lot of labor to be out of jobs and look for alternate profiles to work in aside from the water heaters industry, leading to shortages affecting the production and revenue of an organization. Major agencies are cutting down on the amount of work they can take on due to a shortage in employees with most employees choosing to work in jobs that offer a work-from-home option. For instance, in 2021, the US Bureau of Labor Statistics reported that an average of over 3.98 million workers quit their jobs every month. Various reasons are responsible for this, with Covid-19 and poor response in dealing with the pandemic being among them.
The top opportunities in the water heaters market by product type will arise in the electric heaters market, which will gain $9,859.4 million of global annual sales by 2026. The top opportunities in the water heaters market by end user will arise in the residential market, which will gain $10,305.0 million of global annual sales by 2026. The top opportunities in the water heaters market by distribution channel will arise in the specialty stores market, which will gain $9,369.9 million of global annual sales by 2026. The water heaters market size will gain the most in the USA at $3,602.6 million.
Market-trend-based strategies for the water heaters market include offering smart water heaters to protect the energy and increase the efficiency of the water heater, focus on bringing more advancements in hybrid water heaters or systems, to meet the rising demand and to increase their revenue, companies should consider helping in the development of technologies for improving performance, to switch the power load on the grid, by detecting the temperature, invest in the introduction of energy efficient technologies in water heaters to reduce the overall consumption of energy during the water treatment heating process, consider government associations to maintain their renewable energy and for decarbonization purposes and players in the market should consider appealing to technology investments and associations to develop the market presence.
Player-adopted strategies in the water heaters industry include growing business through strategic acquisition and strategic collaboration to expand geographic reach and strengthen product portfolio and modernize IT estate and workplace, which helps to ensure the continued security, stability and resilience existing technology.
To take advantage of the opportunities, Altus Market Research recommends the water heaters companies to offer smart water heaters, offer hybrid water systems-based heaters, invest in energy efficient technologies, expand in emerging markets, continue to focus on colder regions, offer competitive pricing, continue to participate in trade shows and events, focus more on direct-to-consumer (DTC) advertising and increase focus on online customers
